The final purpose of this paper it has been to focus the attention of the research on the aspect concerning the reaction of a supply chain to causes of distress or issues that could impact on it during the development of routine activities in non-perturbed situations.
The relevance of the case study is that it has roots in a real example, extrapolated from a former experience in the industrial tissue of the writer’s area: so, all the results are proved to be consistent in the reality of supply chain management, at the same time resulting applicable not only to the automotive manufacturing scenario but also to other fields related to distribution and management of loading units.
The study began by introducing the cause of distress in the supply chain of an automotive components manufacturer.
Stress in the supply chain was due to the introduction in the production system of an increase in the customer demand: apart from positive consequence on plant profitability, the situation led also the drawback related to an increment in the production volumes for different categories of drum brakes, during the five-years period spanning between 2018 and 2022.
The main effects of the demand increase were:
- Increase in production volumes of standard assemblies.
- Introduction of a new family of product based on electronic functioning.
Whether the increase in the production volumes for standard parts could be manageable, in case of the brand-new component the same principle resulted to not to be applicable, due to steep increase in volume that needed to look for new solution at warehousing level and re-thinking of management of the internal supply chain for Continental Brakes Italy plant.
To get to consistent values on which base the design of the inventory, the first step is the analysis of the production planning based on forecast of the customer demand in the following years.
The data extrapolated from the Strategic planning file are of paramount interest because they offer a vast scenario of the future behaviour of the company in the next years; furthermore, the plan shows the order of magnitude of the production volumes, for dimensioning the production system.
The results are then collected and turned into requirements for stock: the quantity of raw material for each finished product is deducted from the finished product volume forecast;
knowing the dimensions of each stock keeping unit, strategists can work out the amount of bins necessary to store the raw material, necessary to assemble the part. Then it is just a matter of grouping the different raw material according to macro-families to obtain reasonable values for dimensioning of each warehouse.
Next step, the definition of the main drivers on which establish the improvement: in case of this paper, the chosen elements have been the essentially the typology of storage system, the material handling equipment, and the distribution network around the plant.
So, for the different scenarios, different solutions for improvement have been chosen;
movable pallet racking systems to improve proficiency of previous storage system (stack on floor and traditional static racks), trilateral side-loader turret trucks to perform material handling and picking operations (this solution allowed to dismiss previous system based on warehousing supermarkets), water-spider networking based on kan-ban system and
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utilization of tug train to move raw materials and finished goods from-to assembly lines and storage.
Then, the improvement needs numerical consolidation: after providing an economical assessment of the situation, the next aspect was to establish sensitivity of the new layout to further distress in the supply chain. Setting an extra 10% of volume increase over an extra five-year time interval, in line according to the exposed increment in production, the system was tested to prove its resilience to changes, obtaining as a result a percentage threshold expressing the tolerability of the warehouse and its saturation level.
The principle at the base of this paper was to prove the link between state-of-the-art techniques in warehousing (such as RFID based material handling equipment, dynamic storages, and warehouse management systems) and a real case study, that is interesting from the point of view of connecting the theory about supply chain and what is really performed in industry.
Nevertheless, the purpose is to report to the audience some tips related to the strategic thinking that stays behind the evaluation and design of supply chains and warehouses: how to proceed in the analysis, which tools can be fitted and used to mine data and extrapolate valuable information, which are the solution for management of material offered by the warehousing specialists.
The first step to be considered is to define drivers for the analysis.
They are the guidelines on which the warehouse designer should set its path to the resolution of the problematic. The drivers are useful to understand which aspects are to be emphasized by the user in order to get to valuable solution of the problem, and they can be of different nature: economical, physical (also referred to as constraints), safety drivers, etc.
Once the drivers have been defined, the definition of a new layout or management system can be performed without struggling, because they make clear which aspects should be examined in depth and which one can be overlooked.
According to this particular case, the suggestion to the audience is to establish as a starting point to think about if the solution needs to be designed starting from zero (greenfield warehousing system) or the system needs to be renewed (brownfield solution, just like the one shown in the essay).
Then, once the trail has been set, it is possible to establish the drivers for the analysis: in this case, the suggestion is to split them in two typologies, according to the degree of relevance that the designer attributes to them:
- Must-Be: they are compulsory to develop a consistent analysis and provided valuable results.
- Nice-To-Have: optional drivers, their absence does not compromise the well behaviour of the system, while on the other hand they act as delighters elements, enriching the analysis as a fine addition to make the system proficient.
The must-be drivers, that emerged to be useful when dealing with warehousing design, are essentially four:
- Safety in operations: the core aspect in the decisional process for design of the warehouse, safety is the starting point of every design process involved in industry, due to the fact that in industrial operation the presence of man is a constant reminder, and the main purpose is production at zero risk of injuries.
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Safety aspects in warehouses concerns definition of storage area, their separation from other working spaces through physical boundaries (e.g., walls, protection grids, etc.) or marking tapes on the ground, presence of fall arresting systems, adequate protection systems for the operator manoeuvring the material handling equipment, correct stacking of loading units, adequate spacing for loading preparation, preventing dangerous interactions with walkways or common driveways, installation of warning lights and - Typologies of storage systems: to look for the best solution for guaranteeing that the
loading units are stored in safe conditions, without any risks for operators and for the value of the goods themselves.
The search for the best storage systems should be done according to the following constraints:
o Physical layout of the warehouse: maximum distance ground floor to ceiling, presence of fire extinguishing water grid, distribution grid modes, maximum capable payload of the floor
o Features of the loading units: weight, stackability, type of container, fast/slow mover.
o Material handling equipment: in case it would not be possible to rent or buy new stackers for economical or contractual reasons, it is important to set the warehouse storage features according to the material handling equipment already installed in the plant
Once the storage system has been identified and installed, the next move is to set new storage locations and bins in the Warehouse Management System, to rationalize the storage and picking by attribution of a storage keeping unit to a container, allowing traceability of the load in the warehouse, and counting the movement from-to the storage system.
- Typologies of material handling equipment: the proper choice of a stacking system is fundamental for correct operation of the warehouse. As a core aspect in the design of the facility, the material handling equipment is defined according to different constraints:
o Characteristics of the loading unit: weight, physical dimension, shape o Warehouse layout: amount of space for manoeuvring of the equipment
o Dimensions of aisles: according to the nut utilization of the warehouse, the presence of multiple aisles and they width can invalidate the usage of certain material handling equipment: in case of high utilization of floor area, narrow stackers are preferred to counterbalanced ones.
o Maximum height of the storage system: according to the height of the racks, different options for stacking maximum height are available
o Need for operators: according to the performed activity and the goods management model, it is possible to adopt traditional vehicles or automated ones. AGVs can be used to automate the warehouse, especially when high picking operations are performed and warehouses are highly submitted to freight motion,
o Picking activities or pure stacking operations.
- Internal distribution network: the way by which material is moved around the plant, linking the warehouse facilities to the assembly lines.
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Different methods can be considered to exploit the task: counterbalanced forklifts, pallet jacks or water-spider systems.
In addition to that, the way in which the warehouse is alerted of the need for replenishment is a core aspect to be considered: the use of kan-ban techniques or integrated information systems by is the most adopted system on the industrial environment, allowing a just-in-time replenishment of the assembly workstation and a seamless flow in management of the warehouses.
On the other hand, the nice-to-have driver is represented by the optimization of unused warehousing space, meaning to improve profitability of the logistic area by redesign warehousing area to exploit them at their best. When possible, areas that have been cleared from previous warehousing activities can be exploited to improve implemented warehousing:
e.g., in case the design of the warehouse made necessary to merge a warehouse into another, resulting that some space has been freed, that could be utilized to improve other warehousing systems.
After this short last consideration, the hope by the writer is that the audience enjoyed the paper, finding relief in the chapters for the solution of their similar logistic problems, or just as an inspiration to improve the described solutions and apply it with success in real life distress situations, in the scope of continuous improvement and lean organization, for a more integrated industrial companies and a proficient supply chain of future.
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Final thanks
During the development of this thesis, some people gave me an invaluable help for the deployment of the paper itself, in terms of suggestions, critiques and observations. To them my gratefulness is direct, although I reserve to me every possible mistake or misunderstanding present in the paper, even if I tried to reduce them at the lowest possible extent.
Nevertheless, some final thanks are incumbent on me.
At first, I would like to offer thanks to Prof. Eng. Eugenio Morello, Massimo Simone, and Alessandro Francesco Leverano, tutors: without their support and their deep knowledge in supply chain management, any paper about the topic would not exist.
Then a special thank is reserved to friends and university mates for their precious understanding, cooperation and support into reading and analysing together the drafts and suggesting according to their previous experiences: thank you so much.
My special thanks go to the staff at Supply Chain Management department in Continental Brakes Italy S.p.A., for giving me the opportunity to understand the fine mechanism inside real supply chains and inspiring the definition of the core topic for the paper, making the double effort to turn a work opportunity into a learning chance, for my culture and my academic career.
Last, but not the least, I would like to address a devoted thanks to my loved ones: first, my family, for giving me the chance to undertake the Master of Science, to enrich my personal knowledges; next, my girlfriend Giada, for inspiring me every day and pushing me to the limit, especially during exam sessions. Then my brother Carlo, personal motivator, and dearest friend of mine.
The last, particular thanks go to my oldest sibling Eng. Giusemaria Goso, for her experience applied in the writing of the paper, and my four-years-old nephew Leonardo, my greatest joy.
To each one of them I am dedicating my work.
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